Best Buy Entered China In The Back
A year ago, Wang Jianguo was a purchaser, the acquisition of Jiangsu, Qingdao, home appliance business, a regional appliance chain. Just a year later, his identity was reversed, as the acquiree, the buyers were prominent, and lavish.
5 13, the world’s largest home appliance retailer, Best Buy Group (hereinafter referred to as Best Buy) announced Jiangsu Five Star Appliance Co., Ltd. (Five Star) injection of 180 million U.S. dollars, which was 51% which holding power. Throughout the acquisition will be completed by the end of June.
The past few days, Wang Jianguo, chairman of Five Star has been rushing in Shanghai and Nanjing. He is the new Five Star board of directors composition and busy planning the next step forward.
5 11, Five Star and Best Buy, Trade and Industry Bureau of Jiangsu Province has been completed in the registration, the registered capital increased from 26 million yuan into 990 million yuan, Wang Jianguo remain as chairman and president of Five Star . He also made a Best Buy senior vice president of China the title. Five Star also by private enterprises to transform into joint ventures.
News from Best Buy, we learn that the Five Star Best Buy holding a total investment of 1.8 billion, of which 122 million U.S. dollars (about 1 billion yuan) for the new capital injection. The remaining 058 million U.S. dollars, it is possible from the current distribution to equity holders of Five Star.
“Financial Times” The information that, once the dust has settled the acquisition, Best Buy will also replenishment of 180 million U.S. dollars, and ultimately 75% stake in Five Star. This will also allow the newly formed Five Star board of directors, Best Buy to 3 to 1 ratio of an absolute majority.
So far, China’s first case of foreign-controlled home appliance chain surfaced.
Financing capability
“In fact, 2005 is the fastest growing group of the year, but the lack of financial capacity so that we can not guarantee strong financial support.” Five Star insider on the “Financial Times” said.
Data show that in 2005, Five Star’s stores to expand from 50 to 136. Turnover of the entire fiscal year nearly 700 million U.S. dollars, up more than 50%. In accordance with their development objectives, to the end of 2006, Five Star will strive to achieve the number of stores to 260.
The home appliance chain industry experienced a pre-enclosure type of primitive accumulation, Happy Valley, the vendor simply to rely on paid occupation, to return to the channel’s profit model has gradually changed. To get more profit enterprises must be through increased market share, enhance brand value, etc. to achieve.
It also makes business more value on property rights and market competition for a new round of shop Competition also begins. The giant home appliance chain has broken the old pattern of competition and mutual penetration into other markets.
Expanded scale allows
Five Star in the capital and management bear the corresponding pressure. Compared with Suning, Gome, Yongle blood supply through capital markets, financing channels are limited to Five Star is in this struggle for the next wind.
In fact, Five Star has long recognized that financing through the capital market to improve the importance of capacity. 2001 -2 003 years, Jiangsu Five Star five times relevant to the fight over into the “Listing Service Enterprise” status, and submitted more than 3,000 pages of material.
Blocked in the mainland market, the Jian-Guo Wang sights on Hong Kong. From the second half of 2005 before the acquisition, on the Five Star listing application submitted to the HKEx on the endless rumors. But the insiders: although Wang Jianguo met with many investors, but the country before the United States, after Suning, hardly investors also interested in us.
Best Buy’s intention
Ability to keep up if not for the financing and who is not willing to vacate such a large piece of fat foreign investment. As the founder of Five Star Wang Jianguo, this is of Jiangsu Five former home pay of the company’s wholesale business to achieve China’s fourth largest home appliance chain, choose the co-operation with foreign investors, is also a frustration.
In fact, from 2004, Five Star and Best Buy starting on contacts. But the second half of 2005, more and more frequent contact with both sides.
“The sum of the country, especially the United States Wang, Suning, Yongle with four veterans invited to the United States after visiting the headquarters of Best Buy.” Insiders. Bilateral cooperation to January this year has entered the equity structure, injection of capital, a critical stage.
Period, Wang Jianguo visited the United States several times. Best Buy, which also sent to Five Star and hired Accenture, KPMG and other professional bodies to conduct a comprehensive assessment of the Five Star and assessment. This year’s April, both sides of the main contents of the negotiations has been agreed.
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